Professor Elam

comWe study accounting to better understand the world of business.  Now takeover hedge fund MSFT has offered cash for YHOO.  It just hit me that MSFT is as much a hedge fund as anything else. From the day it bought the software from Seattle Computing for $50 K that would become MSFT DOS to this deal, MSFT has always bought out the competition.  With a cash rich hoard of billions, MSFT is in the position to buy nearly anyone, this is after all a $44 B deal.  And note they are offering cash not stock, that will be hard for lagging YHOO shareholders to turn down.

Note that MSFT sees ‘billions in savings.’  Prof. Elam translation, fire the YHOO employees. You can always find yourself on the losing end of a takeover, and the takeover formula is always the same. We take your operating system whatever that is ( in this case an online search and sales engine) and we use our employees firing yours. YHOO employees are guilty of no more than being on the wrong team.  And so many will find themselves out of work. Perhaps they are in their 40s with mortgages and kids on the way or in college. What to do?

This is when a knowledge of managerial accounting can literally save your bacon. This discipline gives you break even and target profit tools to allow you to understand how to shape your own business to profitablity.  The latest COSTCO magazine contrasts successful versus unsuccessful franchise owners. The winners were able to analyze what it took to be profitable, the losers guessed wrong.  And guess would be the operative verb, that will not work.

As Jimmy Buffet put it, every now and then when I’m in the grocery I’ll take a litle but not much

cause you never know when those hard times will hit ya

and I don’t want to lose my touch.

with managerial accounting we never lose our touch…..